Thursday, February 20, 2014

Physician Salary Discrepancy By The Numbers

An interesting op-ed appeared in the Wall Street Journal the other day. The author was describing the occupations of the top one percent of income earners in this country. To qualify for inclusion in this elite group, a person would need to have an annual income of at least $307,000 in 2010. In the entire country, about 1.1 million tax payers fit the description of the top 1%. He breaks down those 1.1 million tax filers further and noted that 30% are business executives, 14% are physicians, 13% are in the finance industry, and 8% are lawyers.

From those numbers, we can roughly estimate that there are about 150,000 doctors who are in the top 1% of wage earners in the U.S. Who are these doctors who seem to confirm the public's view about physician wealth? This is where the math points to how widespread the discrepancy is in income between primary care doctors vs. specialists and why medical students increasing shun the former. Let's do the math.

Again in 2010, there were about 625,000 practicing physicians in this country. Out of this total, about 209,000 are PCP's, or roughly one third the total. How much money do these PCP's make? According to the last Medscape Physician Compensation Report for 2013, the average income of internists was $185,000 while family practitioners made about $175,000. In both groups, less than ten percent of the doctors made more than $300,000, or the coveted top one percent. So out of 150,000 doctors in the one percent, only about 20,000 are in primary care. Though PCP's are one third of all doctors, they make up about 13% of the top one percent.

Now let's take a look at the specialists who dominate that top tier. Anesthesiologists, according to the Medscape survey, have a mean income of $337,000. Fully two thirds of anesthesiologists make more than $300,000 per year. Gastroenterologists make about $342,000 and over 50% make enough money to put them in the one percent. Radiologists make an average of $349,000 and about two thirds will populate the ranks of the top one percent. In other words, of the roughly 415,000 specialists working in this country, about 130,000, or 30%, will make enough money to earn them the scorn of the liberal wage redistributionists. More startling, they make up 87% of the doctors who are in the one percent.

Though we all like to think that we went into medicine to help others with little regard for our own financial security, ultimately life throws buckets of cold reality in our way. We suddenly realize we have student loans to pay, families to support, malpractice insurance to pay to cover our asses, and appearances to keep (like Archie Bunker once quipped, would you trust a doctor who drives a Plymouth?). The math makes crystal clear why primary care is hurting for more doctors.